Correlation Between Cedar Realty and T Rowe

Can any of the company-specific risk be diversified away by investing in both Cedar Realty and T Rowe at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cedar Realty and T Rowe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cedar Realty Trust and T Rowe Price, you can compare the effects of market volatilities on Cedar Realty and T Rowe and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cedar Realty with a short position of T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and T Rowe.

Diversification Opportunities for Cedar Realty and T Rowe

-0.5

Correlation Coefficient

Cedar Realty  T Rowe

Very good diversification

The 3 months correlation between Cedar and PAREX is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and Cedar Realty is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cedar Realty Trust are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Cedar Realty i.e., Cedar Realty and T Rowe go up and down completely randomly.

Pair Corralation between Cedar Realty and T Rowe

Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 1.35 times more return on investment than T Rowe. However, Cedar Realty is 1.35 times more volatile than T Rowe Price. It trades about 0.11 of its potential returns per unit of risk. T Rowe Price is currently generating about -0.1 per unit of risk. If you would invest  1,282  in Cedar Realty Trust on September 15, 2024 and sell it today you would earn a total of  98.00  from holding Cedar Realty Trust or generate 7.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Cedar Realty Trust  vs.  T Rowe Price

Cedar Realty Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cedar Realty Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish basic indicators, Cedar Realty may actually be approaching a critical reversion point that can send shares even higher in January 2025.

T Rowe Price

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days T Rowe Price has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, T Rowe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cedar Realty and T Rowe

The main advantage of trading using opposite Cedar Realty and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, T Rowe can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in T Rowe will offset losses from the drop in T Rowe's long position.

The idea behind Cedar Realty Trust and T Rowe Price pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.